EURUSD
- The EUR/USD is trading in a sideways pattern above the 1.0700 level early on Monday. This marks a consolidation phase following strong gains in the previous week.
- The USD Index (DXY), which measures the US Dollar's strength against a basket of currencies, has recovered some of its losses from the previous week. The recovery comes after the USD reached a six-week low in reaction to softer US monthly employment data.
- The Non-Farm Payrolls (NFP) report for October showed that the US economy added only 150,000 jobs, falling short of the 180,000 expected. Additionally, the previous month's job gains were revised downward to 297,000 from the originally reported 336,000.
- This reinforced market expectations that the Federal Reserve (Fed) is likely to keep interest rates unchanged at its December meeting and led to a decline in US Treasury bond yields.
- Market participants are now looking ahead to the release of the final Eurozone Services Purchasing Managers' Index (PMI). This data release is expected to influence the dynamics of the USD and may create short-term trading opportunities for the EUR/USD pair.
| SMA (20) | Slightly Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement:In summary, EUR/USD is in a consolidation phase, and its movements are influenced by the recovery of the US Dollar, the weak NFP report, and upcoming Eurozone economic data, particularly the Eurozone Services PMI. The NFP report has reinforced market expectations that the Fed will maintain its current interest rate levels.
GBPUSD
- GBP/USD began the new week with a relatively subdued performance as it consolidates the strong upward movement observed on Friday. This marked the pair's highest level since September 20.
- The Bank of England (BoE) decided to keep the policy rate unchanged at 5.25% following its November policy meeting. The decision was reached with a 6-3 vote. The BoE adopted a cautious tone regarding further policy tightening, while acknowledging that risks to inflation projections were skewed to the upside due to uncertainty stemming from events in the Middle East.
- The US Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) fell to a five-month low of 51.8 in October, down from the previous reading of 53.6. This indicates a slowdown in the non-manufacturing sector, which may have influenced trading sentiment.
- Market participants are now looking forward to the release of the UK Construction PMI. This data may provide some impetus for further moves in GBP/USD.
- Later in the North American session, traders will also pay attention to scheduled speeches by Fed Governor Lisa Cook and Bank of England Chief Economist Huw Pill. These speeches may provide insights into central bank policies and influence market sentiment.
| SMA (20) | Slightly Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD is consolidating its recent gains, with its performance influenced by the Bank of England's cautious tone, US economic data, and upcoming UK Construction PMI. Events like speeches by central bank officials can also have an impact on trading sentiment.
GOLD
- Gold price has commenced the new week with a weaker performance, extending the retracement slide that began on Friday from around the $2,004 level. This retracement followed a multi-day high reached in response to softer jobs data from the United States.
- A global risk rally is in progress in Asian trading early on Monday. This rally is driven by increased optimism that the US Federal Reserve (Fed) is likely finished with its cycle of interest rate hikes.
- The Fed signaled less hawkish monetary policy last Wednesday, and Friday's release of weak US Nonfarm Payrolls (NFP) data reinforced expectations that there would be no further interest rate hikes from the Fed. This emphasizes the Fed's stance of maintaining higher interest rates for an extended period.
- Asian markets are following a positive trend seen on Wall Street last Friday. This optimism is further buoyed by upbeat statements from China's Premier Li Qiang over the weekend. Li affirmed China's commitment to continued economic opening and international cooperation.
- Looking ahead, the week is relatively data-light, with the focus primarily on the action in the US bond market. Massive US bond auctions are scheduled for this week and will play a significant role in influencing market sentiment.
Closing statement:In summary, gold is experiencing a weaker start to the week following a retracement from recent highs. The market is driven by expectations of a pause in the Fed's rate-hiking cycle and a global risk rally. Positive sentiments in Asian markets and a focus on US bond market activities will continue to be central themes this week.
CRUDE OIL
- West Texas Intermediate (WTI) Crude Oil prices are experiencing a lack of significant directional movement on the first day of the week. Prices are hovering within a narrow trading range, roughly around the $81.10 to $81.35 range, during the Asian session.
- Top oil exporters, Saudi Arabia and Russia, have announced their intention to adhere to additional voluntary oil output cuts until the end of the year. This commitment to production cuts is acting as a supportive factor for WTI Crude Oil prices.
- The Middle East conflict continues, with Israel rejecting calls for a ceasefire. This situation is showing no signs of de-escalation and is contributing to the overall risk environment in oil markets.
- Market participants appear to be cautious, refraining from making aggressive directional bets. They are likely awaiting key macroeconomic data from China. Upcoming data releases from China, starting with trade data on Tuesday, are expected to provide insights into commodity demand in the world's largest oil-importing country.
- Further influencing factors include China's upcoming inflation data, scheduled for release later in the week on Thursday. These figures will offer additional insights into spending patterns and overall economic conditions in China.
| SMA (20) | Falling |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Falling |
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Closing statement:WTI Crude Oil prices are consolidating within a narrow range. Factors impacting the market include ongoing geopolitical conflicts in the Middle East, additional output cuts by major oil producers, and a cautious market sentiment awaiting key data releases from China. China's inflation data is also expected to provide valuable insights into commodity demand and economic conditions.
DAX
- German trade data for September painted a bleak picture of the German economy. Exports experienced a significant decline of 2.4%, and imports also fell by 1.7%. Additionally, the Eurozone unemployment rate unexpectedly rose, contributing to negative market sentiment.
- Despite the adverse economic indicators, corporate earnings played a significant role in countering the negative market mood for the DAX. Notably, the German auto sector, with companies like BMW, delivered strong earnings results. This sector contributed to session gains.
- The German auto sector took center stage on Friday, with companies such as Porsche and BMW experiencing gains of 2.56% and 2.04%, respectively. Volkswagen and Mercedes Benz Group also saw increases of 2.00% and 0.66%, respectively.
- There was a positive note in the form of German factory orders announced just this morning, which showed a 0.2% month-on-month (MoM) increase in September, beating expectations of a -1.0% decline. This suggests that the German manufacturing sector is maintaining its recovery momentum.
- On Monday, investors will be closely watching the release of Euro area services PMIs. Weaker-than-expected data in this area could test the appetite for DAX-listed stocks.
- With no major U.S. economic indicators affecting market sentiment later today, corporate earnings remain a significant factor. BioNTech, a German biotechnology company, is scheduled to release its earnings results, which may influence DAX performance.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: In summary, the DAX experienced a mixed week with negative economic indicators but strong corporate earnings in the German auto sector. German factory orders showed resilience, and upcoming Euro area services PMIs and corporate earnings will continue to influence the market's risk sentiment.